November 19, 2024

Five Red Flags to Watch Out for in your Employment Contract

This post was written by: Riya Sekhon

An employment contract is a legal agreement from an employer to an employee to set the terms and conditions of employment. It outlines your rights, responsibilities, and expectations, but not all contracts are created equal. They could have terms that put you at a disadvantage. We at Aston Bond have outlined five red flags to look out for in your employment contract to help you protect yourself.

1.Unclear or Vague Job Descriptions

A vague job description might seem like flexibility in your job role, but it could be risky. Employers could use broad language to assign you duties that significantly exceed your skill set, work hours, or even job expectations.

Before signing your contract, make sure you look for any missing details about your role, reporting lines, or KPIs. Also look out for phrases like “and other duties as assigned”, as this has no clear boundaries. It’s important to ensure everything is clear, as a lack of detail could make it harder to dispute unreasonable workloads or responsibilities later.

If you find that your contract is vague, don’t hesitate to ask for clarification or have specific tasks or boundaries added to the contract.

2.Restricitve Non-Compete Clauses

Non-compete clauses are created to prevent you from working for competitors or starting similar businesses after leaving your job. Clauses such as these are more common in certain types of jobs and industries and whilst they can be enforceable, they must not go further than is necessary to protect the business. 

These clauses can limit your career progression so it is important to ensure they are fair.

Things like broad geographical or sector restrictions, and prohibitions that effectively bar you from using your skills in your industry are big red flags to look out for.

You can try negotiating with your employer to reduce the extent of the clause. Alternatively, you could consult an experience employment solicitor to assess its validity and advise whether they would be enforceable or not.

3.Ambiguous Salary or Benefit Terms

Your contract should clearly explain your compensation, including base salary, bonuses, commission structure, and benefits. Unclear or missing details could leave you underpaid or unable to claim what you’re entitled to.

Look out for clauses that leave bonuses or commissions at the employer’s “discretion”, no mention of salary review timelines, or vague references to benefits without any specifics on entitlements. Ambiguity about pay and benefits could result in disputes later on down the line. 

If you find your contract is ambiguous about your salary and benefits terms, request clear figures or detailed explanations before proceeding.

4.Excessive Probation Periods

A probation period is a set amount of time at the beginning of an employment contract when an employer can assess a new employee’s suitability for the role. They should have reasonable time limits, usually 3-6 months, and clear terms. Employers sometimes extend these periods unnecessarily, which can delay your access to full benefits or job security.

If your contract states that your probation period is longer than six months without a good reason or includes terms that allow the employer to keep extending probation at their discretion, it is a red flag. These terms could leave you in a prolonged state of job insecurity and delay your benefits, such as sick pay.

Try to negotiate a shorter probation period or clearer criteria for passing it.

5.Overly Broad Termination Clauses

Termination clauses define how and when your employment can end. Overly broad or one-sided clauses may leave you vulnerable to sudden dismissal or harsh conditions.

Look out for notice periods that heavily fall in the employer’s favour (e.g., three months’ notice period required from you, but they can terminate you with one month). 

Ensure you seek a balanced notice period and clarity on whether you will be required to use up any annual leave during your notice period or how it will affect any bonus due.

Make sure you always take time to carefully review your employment contract before signing it. If you notice any of these red flags don’t hesitate to seek legal advice or negotiate terms. Protecting yourself from the start can save you from legal and financial stress down the road.

Feel free to contact our expert Employment Solicitor, Ilinca Mardarescu, on imardarescu@astonbond.co.uk, or call Aston Bond directly on 01753 486 777.